Agree with the Emissions take. The 5.0 was thought to not be able to pass the tougher emissions that needed to be adhered to and the 4.6 would offer improved gas mileage (help ford with meeting CAFE standards) and modern technology with the OHC design. Ford didn't have to try real hard to put a lot of hp in a mustang because even through they were at quite a deficit compared to Crapmaros and Firebird, they still outsold them many to one.
Why the perception that the early 4.6s were slow is there for a couple reasons. Besides the obvious that they were slow, you guys already gathered a couple reasons as to why with the restrictive heads, and stock H pipe. Ford tried to make the smaller motor "feel" similiar to the outgoing 5.0, but they only succeded in hampering it (IMO). The short runners in the NPI intake was supposed to help the power down low for the less cubes, but it strangled it up top and would fall on it's knees at 5krpm max. The gears chosen on the early stangs were numerically very low, so it didn't feel fast when taking off. A lot of the later (98s) came with the optional 3.27s, so they "felt" quicker than a lot of the older "not gear optioned" 96/97 stangs. For the 5.0s, you could always bump the timing very easily without buying anyting and tons of head choices for the mature engine and the new 4.6s (there was no aftermarket T/As initially) so no quick timing advance was an option to quickly dial-in when you hit the track. I think most stock late model 5.0 stangs were in the ~14.0 1/4 mile range with the timing change and I remember seeing a lot of 96/97s were in the close to 15.0 range - again all stock (no gears, timing or slicks). I noticed quite a bit of change in feel and actual hp with the pi camswap over the "mild" NPI cams, so I would put cams on the list as well.